Deadbeat BAs: One in Five Student Loans is Delinquent
Help me understand why, again, everybody should go to college? There's a lot of student debt out there. From the Federal Reserve Bank of New York:
The outstanding student loan balance now stands at about $870 billion,1surpassing the total credit card balance ($693 billion) and the total auto loan balance ($730 billion). With college enrollments increasing and the costs of attendance rising, this balance is expected to continue its upward trend.
And, as usual, our president is unbothered:
In October 2011, President Obama announced executive actions to cap monthly federal student loan repayment at 10 percent of discretionary income for college graduates, eased from the previous 15 percent. This cap comes as some relief to those who worry about how they will pay back their debt. Moreover, student loan debts are typically shouldered by recent college graduates and other young workers, who tend to face lower incomes and higher rates of unemployment than older cohorts.
And that has resulted in this:
We find that 27 percent of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that is delinquent is 21 percent...
Once again, Rick Santorum has a point.
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Jun '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
Did they forget to take Money Tree Husbandry 101? Gotta take that one.
Nov '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
You miss the objective. College is not about the students or giving them an education from which they can be employed. It's about a free-rider program for Ethno-American, gender-base, pseudo-science studies professors (so called) and for the college administrators who hire them.
Forgiving and/or capping student loans merely passes this along to tax payers as yet another tax.
Jul '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
My favorite part of biographies is always reading about what people read growing up and what they studied in college. I feel bad for our future historians who will write the biographies of our current and future crop of esteemed public servants! A likely excerpt: "Congressperson (let's not be gender specific please!) X spent most of his (whoops! I give up!) university days leveling up his Night Elf Priest (he was very interested in inter-faith dialogue!) on World of Warcraft, but he did make time for his night class entitled "Deviants and ol' Dixie: A Study of Southeast Georgia in 1890-1891 from a Transgendered Perspective."
Sep '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
When the Obama administration "revised" student loan rules, they took over private (but government-backed) student loans. All (or practically all) of that student loan paper is owned by the U.S. Dept. of Education.
When (not if) that bubble bursts, it's the U.S. taxpayer who will have to cover it. All of it.
Ain't government grand?
Edited on March 8, 2012 at 5:41pmMay '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
A complicating factor here Rob is that the government has very expansive programs for loan deferrment and forbearance. So in some ways these delinquencies are encouraged. If you are allowed not to repay a loan for eight years -- you will never repay that loan until you are made to do so.
The consumer financial protection bureau has proposed some additional student loan disclosures which, despite that institution's dubious origins, seem quite sound. They include school-specific information regarding defaults, graduation rates and placement rates (where those apply).
In general, the federal government as a lender does not do enough, in my opinion, to act like a lender. Given that the feds resort to the SSA and the IRS when it comes to collecting on students loans, I think they could do a better job at the front end making students perfectly aware of the obligations attached to borrowing the money in the first place.
I've posted some additional thoughts here.
Edited on March 8, 2012 at 6:07pmMar '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
It gets even better. Since student loan debt is non-repudiable and many incoming scholars take little consideration of the actual salary of the vocation they are studying for they end up with a loan which in essence can never be repaid. Wages are garnished and really it becomes a system of debt peonage.
Try finding a High School guidance counselor anywhere in America that will warn graduating Seniors about that little trap.
Feb '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
This student loan scandal is the single part of the occupy movement I can understand. Being in debt for years without recourse to bankruptcy is bad.
Government backing to student loans should stop.
Then, and only then, the law should be changed to allow bankruptcy to get rid of this type of debt.
Mar '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
We are underwriting loans for kids to spend four years in the Aggrieved Group Studies Program at Whatzamatta U., and when they get out of school, they can't figure out a means of paying the loans back?
Wow...I never would have seen that one coming.
Jul '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
A nice bubble. Why not start our youths out with a useless degree and no skills coupled with massive debt.
Dec '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
Rob,
This is very important. A great liberal canard has been that "everyone must go to college". It was Lyndon Banes Johnson who was the ultimate Bull in the China Shop on this.
We were the peak of the baby boom. There were more of us and more of us going to college than any other generation. When the middle 70s hit the economy slumped. This was just in time for our generation to graduate and look for jobs. There weren't any. Stay in school and get a graduate degree ? There wasn't any room left in the graduate, medical or law schools. This was also when Bakke had to sue. He got 750 on his MCATs and black women were being let in to Medical School with 450.
This madness ruined lives, lowered standards, and wasted money. I knew it all too well. My father had described to me the way he placed his PHDs. It was obvious from this that the law of supply and demand was still in control for academia.
It is the insanity of "everyone must go to college" that has brought the Greatest Academic System in the World to ruin.
Regards,
Jim
Edited on March 8, 2012 at 6:27pmDec '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
This is a scary trend.
Old way - I saved up and went to college.
I saved up and bought a house.
New way - I got a loan and went to college.
I got into a house without a down payment.
To coin a phrase, Responsibly delayed is responsibility denied.
College used to be a place mostly to study for the ministry or the law. Both professions were heavy on the concept of responsibility. To use a car analogy, before college was a place to get a work truck, now people are getting sports cars. To say it another way should government pay for tools (I made a typo and started typing fools.) or toys?
Edited on March 8, 2012 at 6:38pmSep '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
The student loan bubble will also lead to tighter government control of colleges and universities via the Department of Education.
It's already happening. For example, there is a Dept of Education regulation that requires instructors to choose their textbooks before students register for the course--which can be as much as 5 months before the course starts. That doesn't sound so bad, unless you're the instructor. It used to be that one could use the summer break to review different textbooks, take time choosing the best available, and adjust the syllabus accordingly. No more. This kind of pointless micromanagement is what the Department of Education excels at.
There's a lot more of this coming, believe me.
Mar '12
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
More to the point, is all this money actually helping accomplish the Democrats' stated goal of getting more poor/disadvantaged/minority students college degrees? Not "attending college," but actually holding a degree.
I see a lot of people going into college, taking on a mountain of debt, and never finishing a degree, which might give them a higher earning power that would help them repay those loans. College courses without a degree are often nothing more than wasted money and time.
Federal aid programs have produced, at best, mixed gains for poor students.
http://www.nber.org/chapters/c10097.pdf
May '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
I have a cure for all of this, the student loan thing and the OWS idiocy - Play the liberal game and double down on it. It needs to play like this:
WASHINGTON (AP) - Congressional Republicans announced today that a program that will provide a free college education to all young Americans. But there is a catch.
Senate Minority Leader Mitch McConnell explains, "The Federal Government does not believe in handing out money without attaching strings. Therefore if we are paying your bills you will let the enlightened bill payer determine your course of study. There will be math. We need doctors, engineers and computer scientists. We will not fund liberal arts degrees or gender studies. The man that pays the piper will call the tune."
Furthermore, the Federal Government will pay for student housing provided summers are spent in the military reserve. After nine months of active duty summers, students can receive an honorable discharge or accept a commission into the armed services after graduation.
Watch 'em run.
Dec '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
Well of course someone playing a night elf priest would be such. Real men play Gnome Warriors.
Ricochet on my second monitor kills my frame rate.
Edited on March 8, 2012 at 7:18pmJun '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
I don't think the main problem is the "everyone should go to college" idea so much as the "money no object" approach where students go to the "best" college that accepts them and ignore the cost/benefit ratios.
One reason I chose U.C. Berkeley was that the in-state tuition was such a bargain compared to private schools (even though my parents were paying). Two years at community college plus two at a state university will add up to less than 1 year at most private liberal arts colleges. Students (and parents) should shop around for the best bargain before taking on debt.
Jan '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
Back of the envelope calculations:
So:
Jun '10
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
When I say that I don't believe that everyone should go to college, and in fact, that few people should, I get amazed stares. No one would believe that I'd say such a thing. But the reason most of my students' parents want their children to go is because they didn't go. What kind of reasoning is that?
Jul '11
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
Where'd the ball land?
Right in the lumber yard Danny.
Feb '12
Re: Deadbeat BAs: One in Five Student Loans is Delinquent
This is a bigger part of it that we want to acknowledge. We have millions of parents who feel like they would have been so much better off had they gone to college. Those parents don't know what degrees are useful, don't have the connections to help the kid get a job after graduation, but are convinced that a college job lifestyle just *has* to be better than their own.
My mom was the last of her five siblings to get her BA. Her two year RN (acquired back when such things existed) gave her a better job with higher pay and better job security than the three education and one social work degrees of her sisters and brother. But even seeing that, even knowing that, she still pushed my sister and me to get lots of letters behind our name, assuming that B.A.s and J.D.s and M.Ed.s would guarantee a better life than her own.